Throughout the early stages of the downfall of Express Grain Terminal in Greenwood, President, and Co-owner, John Coleman kept saying a bailout was coming. The hopes of an equity investor never came to reality. This past week John
Coleman was deemed liable for the $71 million owed to UMB Bank under his leadership at EGT in a final default judgement. The court order awarded UMB Bank $71 million in addition to court costs and legal fees. Even if Coleman gets a discharge from bankruptcy, this debt will still be owed. This allows UMB to go after any potential earnings Coleman may have once the bankruptcy case has run its entire course.
UMB filed against Coleman in January stating Coleman has misrepresented EGT’s soybean inventory – a figure used to procure loans from UMB. There were also documents submitted by EGT showing that Coleman had signed for the loans and was liable if his company didn’t repay the loans. Coleman consistently did not provide any answers in previous court dates. Coleman was not available for comment and the Express Grain Terminal website still shows him as president.
And the news keeps getting worse for Colemans as his father, Dr. Michael Coleman – a 99 percent owner of EGT – and the Coleman wives are now liable for a $1.1 million dollar indemnity bond. Travelers Casualty and Surety Company of America filed suit in district court on Tuesday afternoon. EGT had secured a “grain warehouseman’s bond and/or a grain dealers bond.” Grain warehouses must secure the bond in order to get their license from the state. EGT’s license was revoked by the State of Mississippi Ag Commission when it was found that fraudulent financial information was filed in the license application. Traveler’s had issued a $1 million dollar bond in June of 2019 for the Grain Warehouseman’s portion and $100,000 for the Grain Dealer’s bond. This past December, the State of Mississippi Attorney General “informed Travelers that a demand for payment of claims by sellers, depositors or storers of grain against Express Grain and Travelers would be forthcoming.”
A Petition for Determination and Payment of Claims was filed in March of 2022 by the Department of Ag and Commerce. Travelers had already “made demand upon the Indemnitors in a letter dated December 17, 2021, to fully and completely discharge Travelers from the bond or provide an irrevocable letter of credit in the amount of $1,100,000 no later than January 1, 2022.”
EGT had not honored their obligations under the Indemnity Agreement nor have they furnished any collateral security. Dr. Coleman and the Coleman wives are now liable for the $1.1 million dollar bond. John Coleman is in personal bankruptcy and cannot be sued leaving the other co-signers liable.
In other EGT bankruptcy news, the proposed settlement for the grain proceeds in EGT’s possession was uncovered in court filings. The 9019 motion, filed on April 12, shows that the $58 million in segregated bank accounts would mostly go to UMB Bank, StoneX Commodity Solutions, and Macquarie Commodities. More than $48 million will be split among those creditors and farmers who join the settlement are set to divide $9.2 million. The caveat being that the farmers who join the 9019 motion cannot be part of any other lawsuit. Lexington lawyer Don Barrett is still signing up farmers and pursuing a class action suit against UMB Bank. Farmers are deciding what course to take.
The settlement has not been approved by the court and a hearing is set for April 25.
